Goodies to Go (tm)
June 12, 2000-- Newsletter #84

By Joe Burns

Goodies to Go (tm)
June 12, 2000--Newsletter #84
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Greetings, Weekend Silicon Warriors,

Usually the newsletters are done a week in advance, but then an event occurs that I think I want to comment on straightaway. The suggested splitting of Microsoft is such an event. I have found that choosing Microsoft as a topic, no matter what the content, draws fire from somewhere. If I say positive things, someone writes and asks if I am on the payroll. If I say negative things, someone writes and tells me to stop bashing. It's not exactly a win-win situation. So, I thought I would go ahead and just write out my feelings about the recent ruling. Take them as just that, my opinions.

Did you hear...

If the U.S. Congress has its way, soon an e-signature, similar to what happens when you purchase a product with a credit card, will become as binding as the signature on any contract. Senator Spencer Abraham (R-Michigan) is sponsoring the bill. If it takes, the speed of business just got speedier.

There was a lot of talk a short while back about how a lot of people working with the Web are underpaid "drones". The concern sparked talk of unionizing. Well, the Writers Guild of America has made the first step in offering a contract for those who write for the Web. The Guild hopes to standardize pay rates and benefits for those making their living writing in cyberspace.

If you're expecting to get all of your coverage of the Olympics over the Web, forget it. You'll be able to get stats, but no video or audio. NBC paid over 700 million for the rights and not even they will be able to air their tape on the Web. The reason is as much for keeping secrets as it is a concern over copyright and registration. NBC will tape delay big sections of the games and they do not want those section running early. The problem is that these NBC rules only deal with Internet companies in the US. If you head to the CBC in Canada, you may get some tape. NBC is in contact with other broadcast houses to try and stop that.

Now onto today's topic...

The hammer has fallen.

Judge Thomas Penfield Jackson has ordered Microsoft broken up into two sections as a result of its being found guilty of violation the Sherman Act barring predatory monopolistic practices.

Does that sound about right?

If all the appeals, which are sure to come, fail and Jackson's findings are upheld, Microsoft will be broken into two sections. One will deal with the operating systems (PC, network, server), and the other will deal with the...well...everything else. That's the basic breakdown.

In addition, Microsoft will be forced to (Jackson's words):

...stop threatening companies not to use rival companies

...stop creating software that must be used under a Windows OS

...stop creating software that bars competitor's products

from working under Windows

...force the operating system company to treat all hardware/ software companies equally the two companies from reuniting for ten years

Shortly after the ruling, I received an email letter from an HTML Goodies reader that had the subject line, "We got him!"

We? We who? Was this person part of the justice department?

Him? Him who? Bill Gates? I thought this case was against Microsoft.

Yes, legally, it is against Microsoft, but no one in the media, or the public, sees it that way. Other people testified in the case; I didn't see their taped depositions. There are only ten jillion Microsoft employees; no one seemed to be overly happy that a ruling had been brought down upon them.

I guess this is the thing that bothers me about this whole case. I agree that Microsoft did some pretty nasty things. I think they did violate the first and second part of the Sherman Act. I also think they strong-armed some vendors. I will grant you all of that. In addition, I think they should be punished, not broken up. The history of breaking up "monopolies" will, I think, bear me out on this stance. Ma Bell jumps to mind. Yes, I have heard the reasons why people believe this won't work out like the baby bells, but I'm not convinced quite yet.

The concern I have about this case is not that Microsoft was found guilty of some wrongdoings. It's that the case always seemed to be way too personal for my liking. Even Penfield's language in the ruling bothered me. He wrote "Microsoft does not yet concede that any of its business practices violated the Sherman Act." Microsoft claims they have "done nothing wrong".

That, to me, goes to the heart of the public opinion side of the case. It seemed to me like, at any time, if Microsoft had simply buckled and admitted doing wrong, the feds would have gone easier on the company. Of course Microsoft didn't admit any wrongdoing. That would have been stupid. It would have killed any chance for appeal and would have been equal to giving up. I don't think the Justice Department saw it that way. They wanted a public apology. They wanted Microsoft to hang its head and give a heart-felt "I'm sorry". It would never have happened. It never will happen.

The case always seemed so personal. Those who gave interviews always equated getting Microsoft with getting Bill Gates. Now that the Justice department has its victory (for now at least,) pedants are proclaiming victory over Gates. There always seemed to be a shroud of vendetta hanging over the case. Bill had done something horrible and now we shall have our revenge. It is a dish best served cold.

As the reader pointed out..."we got him".

C'mon. Really?

So far we're up to two years of this legal wrangling and I'll bet at least another year or two of appeals are ahead of us. For the sake of argument, let's say the breakup occurs and Microsoft A and Microsoft B are in place. Gates can only head one of the companies. I'll bet he goes with B, the one that does not deal with the operating system. Free choice has been restored and, according to the government, free choice is in place.

But what if...

Now consumers will have the choice of multiple operating systems when they buy their computers. What happens if, as I assume it will happen, Windows is the top choice? Furthermore, what if Windows is the top choice by a huge margin? Remember that the Sherman Act (and the subsequent 1914 Clayton Antitrust Act) does not forbid monopolies, they only forbid monopolies gained through predatory business practices. You personally may not like the Windows operating system, but what if the majority of people out there do?

Maybe there's another case because the lingering effect of what Microsoft did in the 90's is affecting buying practices now? Another lawsuit?

I have heard it said that if consumers had the choice, they would not choose Windows as often because all of the viruses out there are attacking Windows and other Microsoft software.

Well, of course the viruses are attacking Microsoft software. It's the most popular software, thus you can get the biggest hacker bang for your buck. If Linux starts popping up on a ton of computers, I guarantee you'll start to see viruses created that exploit holes in that operating system.

The people at Netscape are thrilled. Former CEO James Barksdale said he felt vindicated. If the ruling goes as outlined, either there will be no Internet Explorer coupled with Windows operating systems, or both browsers will be on the operating system. In addition, operating systems that could not run Internet Explorer before, like Linux, will now be able to. The ruling stated that Microsoft software would have to be able to run on all systems.

Now, consumers have choice. Not that they didn't before, since browsers are free, but now the choice is enforced. Internet Explorer isn't sitting there waiting to be used. Again, what if Internet Explorer is the top choice? I mean, what if it is the top choice by a huge margin? What if market forces literally spell the end of Netscape?

I am asking you to think about this ruling in the future because these things might happen. I say this because I cannot believe that Microsoft's success can be attributed, in most part, to its predatory practices. There has to be something to the product they created.

I say that because when all is said and done, people have always had the ability to choose. No one had to take Windows software. People could have all bought Apple computers. They didn't. There's a reason why Windows became so popular, and it is not totally because Microsoft followed certain business practices. Microsoft puts out a product that people like to use, like it or not. In the future, if this ruling stands and does what it is expected to do, create a more free-choice climate, what will we all say if Microsoft shakes out as the true victor?

It's hard for me to believe that Microsoft is what it is today because of advertising and business practices. Somewhere in there, there must be a decent product or else people would not use it. I don't care how much advertising I force upon you or how many choices I take away from you, if you hate spinach, I am not going to turn you into Popeye.

Microsoft wants this to go to the Supreme Court. Judge Jackson must agree in order for it to get that high. I'll bet it does. If the ruling stands, and "free choice" is forced upon the software market, will things really even out or will consumers ultimately choose just one company?

If that one company chosen is Microsoft, what then? Do we all accept it, or do we break up the company even further?


That's that. Thanks so much for reading.

Joe Burns, Ph.D.

And Remember: Summer's here and that means swimming. You know that you're not suppose to swim for at least 30 minutes after you eat, right? Wrong. This urban myth was attributed to the Red Cross, yet continues to flourish even though the Red Cross flatly denies they ever said it. To make matters worse, the official Red Cross stance on all exercising, including swimming, is that people "receive proper nourishment" before starting the exercise. Go figure.

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